If you have a large iTunes library on your Mac and don’t want to load your iPad (or iPhone, iPad2) up with all the music, you can use Apple’s Home Sharing to stream the files from your Mac to your iOS device. (You need to be on the same Wi-Fi network.) Here’s how…
First, you need to turn “Home Sharing” on your Mac in iTunes. Open iTunes and under the file menu Advanced > Turn on Home Sharing. Enter your information (iTunes Account name (Apple ID) and password).
After you enter the information correctly in iTunes, you will receive a message that Home Sharing is now on. You will need to use the same Apple ID or account when turning on Home Sharing on the other devices.
Next, you will need to turn on the sharing feature on your iOS device. The place to do that is on your iOS device. Choose Settings > iPod. You will need to enter the Apple ID and Password.
[ NOTE: iOS5 has modified the settings. You now need to select Music instead of iPod. ]
Last, you need to open the iPod App on your iOS device with iTunes open on your Mac.
When you do this, you should see “Library” on the top left. Tap once to pull up the “Home Sharing” libraries available.
Tap the library you want to stream to your iOS device. Then select and play the music. It will play on your iOS device as if you were in front of your Mac.
If you need to review the Apple Knowledge Base Article on this, you can do so here.
Right now, it does not appear that you can stream videos from your Mac to your iOS device.